UK Bank of Mum and Dad Calculator
Compare all ways parents can help with a property purchase: gift, soft loan, JBSP, guarantor mortgage, and family offset. See the deposit impact, monthly savings, LTV improvement, and full tax implications. All figures in GBP.
Parent loses capital permanently. No repayment expected. Lender requires signed gift letter.
Compare all 5 main Bank of Mum and Dad structures. Each has different financial, legal, and tax implications for parent and child.
| Method | Parent Loses Capital? | Credit File Impact (Child) | Parent on Mortgage? | Parent on Title? | IHT Risk? | Best For |
|---|---|---|---|---|---|---|
| Gift | Yes — permanently | None | No | No | If dies within 7 yrs | Simplest — clean break |
| Soft Loan | Expects repayment | May reduce capacity | No | No | Potential | Family with repayment plan |
| JBSP | No capital lost | Improves capacity | Yes — liability | No | Low | Income boost needed |
| Guarantor | Property at risk | Improves access | Yes — secured | No | Potential | Child needs lender trust |
| Family Offset | No — savings retained | Reduces interest | No | No | Low | Parent keeps savings |
A family offset mortgage lets a parent place savings in a linked account. The savings balance reduces the child's mortgage balance for interest calculation — without the parent lending or gifting the money. Parent keeps their savings and can withdraw them (with notice).
How to Use This Bank of Mum and Dad Calculator
Enter the property price, how much the child has saved, how much the parent is contributing, and select the help method. The calculator shows the combined deposit, effective LTV, monthly payment, and the specific impact of the chosen parental arrangement.
The 5 Help Methods Explained
The Advanced tier compares all 5 methods side by side — gift, soft loan, Joint Borrower Sole Proprietor (JBSP), guarantor, and family offset — across 6 key dimensions. It also provides an IHT calculator for gifts and explains JBSP mechanics in detail.
The Pro tier models the family offset savings benefit, the Barclays Springboard mortgage product, and compares making a living gift now versus leaving an inheritance — including time value of money.
LTV and Rate Threshold Formula
LTV = (Loan Amount ÷ Property Price) × 100
Loan Amount = Property Price − Total Deposit
Monthly Payment = Loan × [r(1+r)^n] / [(1+r)^n − 1]
Key UK LTV thresholds: 95%, 90%, 85%, 80%, 75%, 60%
Crossing a threshold typically saves 0.25%–0.75% on your rate
Every LTV tier crossed can save significant money. Moving from a 90% to an 85% LTV might save 0.4% on rate — on a £200,000 mortgage over 25 years, that is over £14,000 in interest saved.
Example: Jake and Sarah Help Their Son Buy in Leeds
The Wilson Family — JBSP Arrangement
Jake and Sarah's son Tom earns £38,000 and can only borrow £171,000 on his own. They want to help him buy a £260,000 flat without gifting their savings.
| Property Price | £260,000 |
| Tom's Savings (Deposit) | £26,000 (10%) |
| Tom's Income | £38,000 |
| Tom Only Max Mortgage | £171,000 |
| Jake's Income (added via JBSP) | £52,000 |
| Combined Max Mortgage | £405,000 |
| Mortgage Needed | £234,000 |
| Jake on Title? | No — sole proprietor is Tom |
| Stamp Duty Surcharge? | None — Jake is not on title |
Jake boosts Tom's borrowing power without owning a stake, avoiding the 3% stamp duty surcharge on second properties. Jake remains financially liable if Tom defaults, so this requires significant trust and financial planning.